Kalshi’s estimate of $90T in offshore volume is now central to warnings from former regulators, who say very tight US regulations on perpetual futures could entrench offshore dominance in crypto derivatives instead of ending it, even as efforts grow to bring perps onshore.
Officials Warn on Offshore Liquidity Threat
Senior regulatory personnel from the SEC and the CFTC mentioned that if they require such things as registration, setting of margins, and surveillance too rigorously, it should drive liquidity offshore and as a result result in a loss for the domestic market.
Source: Global Business and Finance Magazine
Among the reasons cited was that the offshore volume of crypto derivatives would have been more than $90 trillion by 2025 as Kalshi, whereas the volume of US-regulated crypto derivatives was less than $5 trillion during that period.
This alert follows recently published CFTC staff opinions on perpetual contracts and increased SEC surveillance of leveraged products offered via intermediaries and exchanges.
Also Read: Kalshi Partnership With Alpaca Expands Access to Event Contracts
Perps Reshape Market Structure
As per CoinGecko, perpetual futures are the major players in crypto trading, making up more than 70% of centralized exchanges’ volumes. Traditional futures do have expiry; because of this, they are different from perpetual futures, which depend on the funding rates to stay aligned with the spot market.
In the United States a number of venues including Coinbase Derivatives, Kraken, and Kalshi, plus protocols like dYdX, Hyperliquid, and GMX, are exploring ways to be compliant for institutional investors and hedge funds as well as the small trader, the domestic perp would be regulated by CFTC, be transparent with about insolvency issues, and be well-integrated with stablecoins, ETFs, and prime brokerage.
Also Read: SEC Pushes New Crypto Custody Framework Toward Approval
Regulation Faces Balancing Act
This topic is in the larger context, it relates to the trends for 2026: the expansion of spot authority by CFTC, the change of SEC position and Market Structure Bill of Congress.
If the legislation is too restrictive it will limit monitoring, tax revenue, and consumer protection while being too permissive could be raising the risk of leverage.
Source: WSJ
Also Read: XRP Price Targets $2 Breakout as Evernorth Clears Key SEC Registration Hurdle
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